The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1887-12-27
Is TARIFF DUTY TAX ON CONSUMERS

A superficial view of the laws of political
economy leads men astray many things be-
side the tariff question. One who deliberately
| expends large sum to erect plant for begin
ming line of manufacturing certainly taxes
himself. Perhaps there will be no return
| for such tax in year more. But he has
also deliberately considered the question Of
supply and demand for the articles he pro-
poses to manufacture. as well as those of raw
material, wages, ETC. In the outcome he
realizes good profits on his investments. and
finds that he has acted wisely, for compliance
with the economic law has justified the tax.
And so, for very brief period, the levy of a
duty on foreign goods seems to be tax on con-
sumefs, and sometimes is. No one will ever
go astray on this subject who will consider
the facts as they appear, rather than the the
cries of political economy. This fact was
never more tersely put and illustrated than
once in a stump harangue free
trade "Do you know, my friend, that this
| tariff compels YOU to pay cents
| yard (the duty at that tine) more than you
ought to for the shirt on your back" One in
| the audience replied: ~ suppose that must
be SO, though can't see how, for only paid five
and a half cents yard for it." This incident
illustrates the operation of the law of political
economy under the element of competition.
| The law creating duty of six cents yard
was enacted when we had little or no compe-
tition in this country. But when we built
factories and made shifting in competition
with England the price fell below the import
duty half cent on the yard And SO find
that the tariff duty not tax the con-
sumer, for by competition the goods were
greatly reduced in price to consumers. This
is the particular point of this controversy
many overlook and which free-traders pur-
posely ignore. What are the facts of history
on this point Of the tariff controversy In
his report as Secretary of the Treasury in
1871, Alexander Hamilton said:
Though it were true that the immediate
and certain effect of tariff was an increase of
price, it is universally true that the contrary
is the ultimate effect with every successful
manufacture. When domestic manufacture
has attained to perfection, and has engaged in
the prosecution of it competent number of
seldom never fails to be sold cheaper, in
process Of time, than the foreign article for
which it is a substitute. The internal com
petition which takes place soon does away
with everything like monopoly, and by de-
grees reduces the price of the article 20 the
minimum of reasonable profit the capital
employed. This accords with the reason of
the thing and with experience"
And so with nearly a hundred years of the
;rhf IF "
toms reasoning, it is rather remarkable
that otherwise fairly intelligent people
fail to grasp this important princi-
pie of political economy. We call at
tention to few of them as they have ap-
peared in all these years of public record IN
der the operation of our tariff laws. We have
before, and recently, alluded to the rapid re-
duction in the price of iron and steel rails
under protection, as competition was built up
in this country; how the price run down till
below what had been the duty on them.
Here is an illustration of this principle of
competition under low and high tariff: Be-
fore we built cotton factories in this country
we paid England as high as so cents yard for
cotton goods that under manufacturing COM
petition in this country have since sold at 5
and cents. The tariff of 1860 was a very
low cotton goods, but that existing in
1882 and now very much higher. Here are
the comparative prices staple cotton fab
RIGS under the two tariffs:
1850. 1892
Cents Cents.
Bleaehed shirtings, per yard .---.-.155o 1885